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International Money Transfer 

How transfer money abroad and save yourself thousands in the process 

A common challenge faced by expats and travellers is to transfer money to or from Australia, UK, South Africa, NZ, USA and Canada between banks. Bewildering arrays of choices exist, including using expensive international bank transfer services.

Finding a secure and inexpensive money transfer service is super easy and over time can easily save you thousands.

Several money transfer options exist and the best one for you will depend on your particular situation.

In general there are two situations in which travellers, expats and working holiday makers find themselves:

 

Situations - What's Best for You? 

 

Situation 1 

 

Situation 2

 

 

  • Primary aim is to work
  • You have bank accounts in both countries
    (or your recipient has one)
  • You are sending reasonably large sums of money - greater the £500/$1000

What to do in this situation >>

 
  • No bank account in the destination country
  • Passing trough the country
  • You are sending reasonable small sums of money - less than £500/$1000

What to do in this situation >>

   

There are two main options for Situation 1:


Option A: Use a dedicated Money Transfer Company with zero or low fees 

and a competitive exchange rate (typically 1%-2% less then midmarket rate)

 

Option B: Use your Bank and pay fees up to $100/£50 and get unfavourable exchange rates
(typically 2% - 4% less than midmarket rate)

 

If Situation 1 best describes your circumstances (you plan to settle in one location for a while and you have a local bank account), you can save a lot of money, time and hassle by transferring money with a service that facilitates international bank to bank transfers.

A new breed of online money transfer companies that are highly cost competitive and user friendly compared with transferring through regular banks.

              

There is one option for Situation 2:

 

 

 

C: Use a Remittance Company 

 

If Situation 2 best describes your situation, you may wish to utilize an established, global money transfer company such as Travelex or Western Union.

Sending money through these companies are nearly always in-person, cash transactions. Outlets exist nearly everywhere in the world.

   

 

Option A: Money Transfer Company

Option B: Your Bank

Option C: Remittance Company or PayPal

Money transfer companies allow you to transfer money quicker, easier and cost far less than your bank.                                                                       

Fees are low or not charged.

Exchange rates are competitive.                                 

You can transfer money from your bank to another account overseas whether it be your bank account or someone else's.

Your bank will charge a fee for this service ranging from $20/£10 to $50/£25 

The receiving bank will also charge you a fee for receiving funds internationally ranging from $20/£10 to $50/£25 - usually this just means less of your money arrives as the amount is deducted automatically.

However the main cost is usually hidden in the exchange rate offered. For amounts over $1000/£500 exchange rates are usually more than the fee charged*.

If you do not have a local bank account or are simply passing through another country, your only option may be to uses services like Western Union to transfer cash to pick up in-person.

PayPal may also be a good option especially for smaller amounts - less than a few hundred dollars (recipient and sender both need PayPal accounts)

 

*Banks earn income from international transfers through fees and their exchange rate offered.

In our tests, exchange rates offered by Banks are typically 2-4% more than a Money Transfer Company.

For example, if you wanted to transfer money from UK to Australia, Canada, Europe, USA or Vice Versa- Say $1000/£500 being transferred on average $75/£35 less will arrive in your bank account due to fees and the exchange rates offered by the banks. 

 

Situation 1:

Option A: Money Transfer Companies

In recent years a new breed of online money transfer companies has emerged that are inexpensive and user-friendly compared with transferring money through your banks. 

To make a transfer through one of these companies, you'll need to establish account with them and be able to access your sending bank account via online or phone banking.  

The key is to choose a service based on the amounts you intend to send.

Of course it is also important to choose a reputable company as your money will be transferred to them before it gets to you.

The three companies we compare here are all secure, credible institutions that you can trust.

All companies mentioned are registered with the the FSA in the UK and ASIC in Australia and other countries including Canada, USA and South Africa is which they operate.

 

How it Works

 

1

Register online with the transfer service of your choice.

2

Input transaction details, including the amount you want to transfer.

3

Get approved by the the transfer company - You may need to scan/email a copy of your ID for the first transaction.

4

Transfer funds through your bank using the account details from your transfer company.

5

Get your money! Your transfer service will deposit your funds in your destination account. 

 

Leading Money Transfer Companies  

                  

Below are three of the largest international money transfer services that we use ourselves.

They also have offices overseas where others operating out of the UK do not.

              

 

 1st ContactTranzfersWorld First 
Fee Per Transfer

GBP to AUD = £2
GBP to NZD = £1
AUD to GBP = AU$5
NZD to GBP = NZ$5

No fees for: 1st transfer, every 5th transfer and transfers on your birthday
 

AUD $15, GBP £7, CAD $15, USD $5, NZD $12

No fees: transfers over £3000/$10000

No transfer fees
Min. Transfer Amount  No Minimum  £50 or $100   £250
Exchange Rates Cost ** 1.5% - 2% 0.75% - 1.5% (rate gets better as amount increases) 0.75% - 1.5% (rate gets better as amount increases)
Countries Served Australia, UK, USA, Canada, New Zealand, South Africa, Poland, Europe and the UAE  UK, Australia, New Zealand, Singapore, South Africa, Singapore, South Africa, Canada, Hong Kong, Europe (Euro and Polish Zloty), Sweden and the USA  UK, Australia, New Zealand, Canada, France, Spain, Europe and many more 
Support  Phone support 24/5  Phone support 24/5 Phone support 24/5
Option to pay off credit cards? 

YesPayments can be made to credit cards in AUS, NZ or SA but not to credit cards issued by UK banks

Yes: Payments can be made to credit cards in NZ and AUS only. 
No
App for Smartphones?  Yes No Yes
Option to lock in an exchange rate?  Yes No Yes: Choose a favourable exchange rate and automatically send transfers when that rate is reached. 
Free Rate Alerts?              Yes Yes Yes: Get rate alerts to your phone, email or both.

 

Bottom Line 

1st Contact is our preferred service for relatively small amounts - below £500/$1000

Why?

1. No minimum transfer amount.

2. You can see the exchange rate you will get without logging in so you can compare with your bank easily.

Click here to get one extra transfer free

Tranzfers is our preferred service for amounts greater than £500/$1000 but less than £5000/$10000.

Why?

1. Customer service by phone or online 24/7 with o
ffices in Australia, Canada, NZ, USA and UK. 

2. Ability for travellers to pay off credit cards in Australia or New Zealand.  

Click here to get the first two transfers free

World First is our preferred service for amounts greater than £5000/$10000

Why? 

1. Ability to lock in the exchange rate at the time of transfer or lock it in later is important for larger amounts.


2. Online and phone services suitable for expats and businesses worldwide.

Click here to get fee free transfers

** Rates vary based on the amounts sent and the countries transacted between. All beat the banks.

Examples

Transferring funds to the UK from overseas

You need to transfer money from Australia (ANZ, Westpac), Canada (CIBC, BMO), Europe (PBN Paribas, Deutsche Bank), US (Bank of America, US Bank) to the UK.

After locking in a favourable exchange rate you would simply move money online from your account to the money transfers company account in your name.

This amount is then automatically paid to your nominated account in the UK (Barclays, Lloyds,  HSBC) 

Transferring funds from the UK to overseas

You need to transfer money from the UK to your bank back home.

After locking in a favourable exchange rate you would simply move money online from your account in the UK (Lloyds, Barclays, HSBC, Bank of Scotland) to the money transfer company account in your name.

This amount is then automatically paid to your nominated account in your home country.


 

WORKgateways Explainer Video

"I have personally used international money transfer services for almost a decade now and love the savings and service you get over a bank. For me the best part though is the ability to lock in a rate in real time - this in itself is fantastic and I regularly find myself saving a few hundred dollars with just a few checks. I also found that even though I tend to like doing most everything online, you can pick up the phone anytime (24 hrs) and get someone who can help you if you have any questions at all - I love the piece of mind this brings."

Quinn Askeland founder or WORKgateways

 

Option B:

Transfer Money Using Your Bank

Most banks provide internationl transfer services. Because you can generally transfer money online through the bank account you've already established in your home country, this transfer method is convenient but relatively expensive. Transaction fees generally range between 15 GBP (Lloyds) for standard services and up to 35 GBP (Barclays) for priority services. From an Australian bank for example it usually costs about 20 AUD. Canada and the USA range from $25 to $50. Europe 

Furthermore, the receiving bank may charge a fee as well which comes off the orginal amount you send.

International money transfer companies offer more favourable exchange rates and low or no fees.

However if you're looking to make a one-off transfer and avoid the hassle of setting up any new accounts, and don't mind paying these fees, this may be the option for you.  

HSBC, Barclays, Lloyds and Royal Bank of Scotland all offer overseas funds transfer services.

How it Works 

1        

You will need to be able to send money online with your current bank.

2

You will usually need to know the address of the receiving bank, the account details of the receiving account, the account name and often the receiving bank's SWIFT code (an international bank identification system - ask your current bank for their SWIFT code).

3

It's a good idea to check with you bank about exchange rates. 

4

You can use this method to send an international money order online to your own home bank account or to a third party.

 

 

Banks vs. Transfer Companies 

Infographic with thanks from Transumo

Transfer Companies         Banks 

Fast Money Transfer                                                +

Low or Free Money Transfer                                     +

Best International Money Transfer Rates                    + 

Lock in Exchange Rates Online                                 +

Get Money to Your Account Fastest                           + 

Security                                                                  +                           +              

(Both Banks and Money Transfer Companies have to meet the needs set out by financial regulators in the contries they operate. This includes security)

 


  

 

Option 3:

Wire Cash through Global Companies 

If you're visiting a country for a short time and simply need some cash, you may wish to utilize an established, global money transfer company such as Travelex or Western Union. Sending money through these companies almost always involves in-person, cash transactions. Outlets exist nearly everywhere in the world. W 

This is great if you need small amounts of cash on short trips. You'll be able to access these companies from nearly anywhere, you won't need a bank account or internet access to receive cash, and your money will arrive fairly quickly. You can't send money to yourself from your own account this way and you must pick up the cash in-person.  

In the UK, Travelex will also transfer cash to a bank account, and can also organise an in-person pick-up in the UK, for smaller transactions this is often a great way to go.

 

Pros

  • No location too remote
  • No internet access required,
  • No local bank account required, send and receive cash.
  • Send a money order online to third parties — or to yourself if you'll be there to pick it up.
  • Sending your international money order online occurs quickly

Cons

  • Money transferred in cash making large sums unmanageable,
  • In-person pick-up is required — you must go to the actual Western Union representative and fill out a form.
  • Your recipient must pick up in person.
  • A quick-fix solution — not a long term solution.
  • You cannot transfer money from an account or from your credit card - cash only.
  • You can't send a money order online to yourself — unless you'll be back at home immediately to pick it up.

How much does it cost?

Transferring money through the above companies will usually cost either a percentage of the total amount transferred, or a set fee for certain amounts.

Therefore the amount ending up with your recipient will depend on the exchange rate and the transaction fee (percentage) that Western Union charges.

For example: sending 500GBP will cost approximately 37GBP — these fees change and you should check with your nearest Western Union or Travelex outlet.

Best For

Receiving relatively small sums of emergency cash from your friends/ family back home.

Organisations such as Western Union and Travelex seem to be a better option for people traveling in remote locations and who are not settled there (no bank account or address).

Their services are also suitable for travellers overseas who need quick cash sent from home by family or friends. A money order — UK to Australia for example is easy to arrange.

Worst For

The amount of money that actually ends up in your pocket. Consider both the exchange rate and fees to calculate and compare companies.

 

 

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